Often, when a business thinks about a reward scheme, its first thought is attractive remuneration and incentive bonuses.
But that doesn’t have to be the only card up your sleeve.
A far better approach is to offer a total reward strategy which goes beyond monetary value to offer employees other forms of rewards that are truly valuable and improve their engagement in the workplace.
So, what is a total reward system, and how would it apply to your organisation? Let’s explore the answer to these questions now.
Total Rewards Strategies That Go Beyond Monetary Value
What is a Total Rewards Strategy?
Financial incentives are the most common form of employee reward and recognition. But they aren’t the only reward system. There are plenty of other ways you can incentivise your team to encourage loyalty, productivity and great team morale.
So, what is a total rewards strategy?
A total rewards system goes beyond offering remuneration as a reward. Rather, it is an entire system that helps to develop motivation amongst your people by offering benefits, perks and other things your employees might value.
Total rewards strategies can include aspects such as flexible working conditions, things that boost physical and mental health, recognition, development etc. They can be things that your company has to invest in financially or less tangible things that are still valued by your team.
Basically, the premise is that you don’t have to give your people a monetary bonus to keep them motivated in the workplace.
Why is a Total Rewards System Great?
Total reward is more of a strategic approach to reward than simply offering a great salary package. While remuneration is an essential hygiene factor, it doesn’t have to be the only thing.
Here are some of the benefits of a total reward approach:
Attract and retain employees
An attractive reward scheme can help make you an employer of choice. That makes it easier to attract top talent to your organisation. But not only that, it can help to retain those talented employees long term. Not only attracting but retaining skilled employees can enhance your organisation’s reputation, making it easier to bring more top talent on board when needed.
Employee experience
When your employees feel valued and respected, they are happier in their work. By providing them with excellent rewards, you improve their overall experience in the workplace. This creates great team morale and more productivity within the organisation.
Employee engagement
Happy employees are engaged employees. And if your team are feeling rewarded for their efforts, they will remain engaged in their role. They will also be more focused on their tasks, will work towards achieving company goals, are consistently motivated, and are often willing to go the extra mile. Not only does this make it a more pleasant experience for your employees, but it can help to boost company results too.
Meeting employee and company needs
A good total reward approach keeps everyone happy. Employees are motivated and loyal to your business, meaning they will strive to be the best they can be. In turn, this helps your organisation move forward, and meet goals and objectives.
How to Make it Valuable
A total reward system is a really valuable tool, but it needs to be used in a way that your employees will really see its value. So, here are some ways you can do that.
Set expectations
Some rewards will obviously be easier to execute than others. Everyone can participate in a wellness programme, but not everyone can have the most sought after desk in the office or the same flexible hours as workplace cover is still needed at all times. So, it is important that clear expectations are set at the start and that everyone gets rewards that feel valuable to them.
Communicate
Ensuring employees value the rewards on offer relies on great communication. Awareness is the first step (and often one that is assumed, and missed). If people know what is available to them and why it is being offered, then they will be able to respect and value the rewards.
Don’t use it as an excuse to pay less
It can be tempting to over-rely on low cost benefits that don’t impact the bottom line. However, if monetary pay is set too low, the whole system will fail, not matter how amazing the culture and pers are.
Ask your employees – and listen
Are employees aware of all the benefits on offer? What do they think of them? It could be that some benefits (that still cost money to offer or implement) are not providing the intended ROI and could be replaced by something else. Ensure that the rewards you choose are attractive with a good perceived value. That doesn’t mean you need to spend the earth, simply choose things that your team will appreciate and strive for.
Get everyone on board
Like any strategy, total reward needs commitment from the top down. Your managers will need to lead by example, executing their part of the reward strategy for the team to buy into it and generate the results you want.
How Can You Create an Appropriate Strategy?
The structure you choose for your rewards strategy will be dependent on your company’s approach to employee management. But as a general rule, these are the key principles to consider:
- Think of your rewards structure holistically, considering competitive remuneration along with other non-monetary rewards. Think about ALL the reasons an employee might choose to join, stay or leave the company.
- Ensure your pay structures recognise and reward performance, but also values, behaviours and attitudes.
- Map your pay progression to career progression – employees need to see the progress they can make.
- Find your USP – you need to be externally competitive overall but not market leading in everything.
- Rewards should be tailored to the organisation offering them – consider brand advocacy, values and company culture when designing the package. If you values say ‘we care about you’ make sure your benefits say that too. If you offer a great product to customers, can this be offered to employees too?
- It should be people centred, focusing on what your employees truly value. Make the offer as flexible as possible, offering a range of rewards that meet the lifestyle and career stage of each employee.
- Most importantly, reward decisions must be fair, consistent and transparent. Follow through must be completed to check for correct implementation.
According to CIPD, these are some of the most popular total reward offerings:
- Flexibility
- Freedom and autonomy
- Ongoing availability for professional and personal development
- Work that is meaningful
- Fair treatment
- Wellness programmes
- Recognition for achievement and commitment
- Opportunities for progression
What Total Reward Strategy is Right For Your Organisation?
Ready to develop a total reward strategy that is tailored to your organisation? Then I can work with your management team and key stakeholders to create a strategy and framework that aligns with your company values and offers valuable remuneration and non-monetary benefits for your employees. Or I can coach and upskill you/your team, to ensure you are optimising your reward spend.
Reach out to me today for support and advice.
You can also download our free guide on how to develop a total rewards strategy for your organisation. It’s packed full of useful information such as
- Key components of a total reward strategy
- Four dimensions of performance
- Unique 4-step strategy approach
